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    When the price is right - Telecoms.com

    When the major incumbents in a given market announce that they are to launch a new technology, it’s really no more than you would expect. However, when the smaller operators begin to plan their next generation technology roll outs, you know that the industry is on its way to maturity. This is certainly the case for LTE, which has full backing from Cricket Communications, the consumer facing brand of Leap Wireless. Ahead of his attendance as a panel speaker on Day One of the LTE North America conference, we speak to Bill Ingram, SVP of Strategy, Cricket Communications, to gain some insight into his Cricket’s strategy around LTE.
    Cricket Communications, is a subsidiary of Leap Wireless, and holds a seventh placed position in the competitive US wireless carrier market. It publically announced its plans to launch LTE in the first quarter of 2012. However, despite coverage of 100 million people its 5.8 million customer base represents a US market share of just 1.77 per cent market share, according to Informa WCIS statistics. This compares to 10 per cent share for the fourth placed T-Mobile USA, a clear demonstration of the varying levels of scale in the US cellular industry.
    This variation in size naturally informs the each company’s technology strategies and as its differentiator Cricket Communications has always led with its unlimited packages, applying to voice, SMS and data. Yet with calls across the LTE industry to move away from unlimited packages is it not going to find itself struggling to cope with the ever increasing data burden?
    It’s a question we put to Ingram. “Data is difficult because of the projected usage, so it really comes down to what you think that the future usage would be. I would agree with some analysts that the future of data will make it difficult for unlimited providers. Massive usage puts pressure on the networks today and LTE will help with that as you’ll never get away from the high volume user.”
    So will Cricket need to introduce data-limits as it moves into an LTE world next year? “I hate to say limit, because if someone wants to use a massive amount of data and pay for it, we’ll take their business. So I’m not ready to announce the death of the unlimited model, but I agree it will change and morph into something else”.
    Ingram is clear that moving to LTE will actually help Cricket to deal with the bandwidth issues but explains that it’s a balancing act between investing enough capital in cell sites and spectrum, when it becomes available, and charging users a fair price for service. However, he seems to relish the challenge. “It’s actually a very interesting puzzle”, he says, “which we’re all getting ready to solve for the future of high speed wireless data.”
    Ingram admits that in terms of spectrum frequencies Cricket is at a disadvantage compared to the likes of AT&T and Verizon, as it doesn’t have the financial muscle to get access to the optimal 700MHz frequencies. However, it has plenty of PCS and AWS spectrum at its disposal and with 10MHz of bandwidth reserved in each of its market, Ingram is confident at least that it will be able to deliver good performance when it launches LTE.
    The key concern though for Cricket is cost. Cricket’s customers are traditionally very value conscious, and as such have no interest in paying over the odds for brand new technology, such as the expensive early LTE handsets that are carried by AT&T and Verizon. Indeed, Ingram is quite happy for the larger players to take the lead in order to create the required economies of scale.
    “We launch terminals when they fit our marketing plan. So even if they were available [in our frequencies] we wouldn’t launch them, because the early adopter market entry prices are so high. We generally wait about 6-9 months until the cost of those terminals has come down. And the only reason the cost comes down is because volume is being generated by the big guys.
    “Everyone would like to have a nice car, like a Mercedes, but Toyota makes a pretty nice car and they sell a lot more than Mercedes does. Why doesn’t everyone buy Mercedes? Because they are four times the price! We’ve got the network ready but we’re not going to launch until the price is right.”
    With an eye fixed firmly on cost then, it’s not surprising that Ingram is a big advocate of the potential of network sharing, a topic he will be speaking on at the LTE North America conference. He admits that the likes of AT&T and Verizon don’t need to go for it, but for the rest of the players he believes it makes a lot of sense.
    The widely publicised deal between Sprint and LightSquared, though still under the microscope for its GPS related issues, has certainly brought the concept to the fore in the US, something that Ingram is glad about.
    “I think there’s a great opportunity to do network sharing. It hasn’t occurred much in the United States, and it’s much more common in other parts of the world, but I’m a big believer in the concept.”
    Ingram refers to the fact that data usage over the next couple of years is predicted to be hit 50GB per user. This will break down as 50 per cent occurring in the house, 10 per cent in public wifi areas and only 40 per cent on the actual cellular network – echoing
    comments made by Deutsche telecom CTO, Olivier Baujard


    at the recent Broadband World Forum, that most data traffic is limited to three cell sites. This means, Ingram believes, that it makes sense for the likes of Sprint, MetroPCS, US Cellular and Leap to, “co-operate along with spectrum providers to optimise the location of the cell sites, and to share these expensive and precious assets, which is primarily spectrum. You can move cell sites around, but [not] spectrum. [This will] create a very competitive network where the economics are shared amongst the providers of assets.”
    Ingram creates a very simple picture to illustrate his thoughts. “It’s as if we and the other carriers living down the other end of the street take down the fence between our back yard so we have a larger back yard to move around in. I’m not selling you my property, but we both great better utility. Is that a bad thing to do? Is that recognition that you can’t buy a country estate with hundred and acres and keep it all to yourself? OK. Well, I can’t do that.”
    Ingram then seems quite content with Cricket’s place in the future of bringing high speed mobile broadband to the masses, and suggests that for all the hype there actually may be little need to race towards the 4G horizon.
    “The early signs of data usage on LTE are not as robust as people have anticipated and he paraphrases Amara’s law to illustrate his point. “ I always say, ‘People overestimate the speed at which new technology takes effect, but they always underestimate the impact it has on society.’”
    When the price is right then, Ingram knows that the masses will flock to LTE devices and the services it will enable and Cricket Communications will be perfectly placed to take advantage.“High speed data is going to be very significant in our lives… but people aren’t rushing to it as fast as the analysts thought – because of the cost. Which is where we come in.”


    Source:
    http://www.telecoms.com/35197/when-the-price-is-right/






    Last edited by avenue; 10-20-2011 at 10:40 AM.
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